Posted on 04/20/2023 12:24:53 PM PDT by Twotone
The latest banking crisis only increased concerns that the U.S. economy is headed for a downturn. Some politicians, including President Joe Biden, are now exploiting recession fears to extend pandemic-era aid programs.
The sad reality is that these aid programs cannot deliver on their promises to solve the poverty problem.
Between the beginning of Ronald Reagan’s presidency and that of Donald Trump, taxpayer spending on the nation’s 13 largest means-tested welfare programs increased by almost 240 percent. While poverty generally tends to fall during boom times and rise during busts, the overall trend has been mostly unchanged. That’s a terrible return on public investment.
My recent research, commissioned by the Commonwealth Foundation, suggests the ever-soaring growth in public spending is likely counterproductive. In fact, cutting government spending—and expanding economic freedom more broadly—can simultaneously lower poverty and promote prosperity across all income levels.
Economic freedom entails expanding the sphere of personal choice—and minimizing the role government plays in our lives. It means reasonably low levels of government spending, low taxes, and a lack of onerous labor market regulations.
Nearly three decades of research has found that areas with higher levels of economic freedom experience positive outcomes, ranging from faster economic growth to cleaner environments. Data from the 2022 Economic Freedom of North America (EFNA) report shows that, on average, residents in the most economically free states have incomes per capita over $3,000 higher than residents in the least free states.
The least free states also tend to spend significantly more on public welfare programs—with the 10 least free states spending almost twice as much per recipient as the most free states. While poverty rates are higher in less free states, they’re not high enough to necessitate twice the spending. Unfortunately, government solutions that focus on the alleviation of poverty—and not the promotion of prosperity—come riddled with damaging unintended consequences. The structure of many programs is at odds with incentivizing upward mobility, essentially trapping recipients in the very poverty they want to escape.
The goal of a successful anti-poverty program should be creating an environment conducive to broader human flourishing. Economic freedom is the key to crafting this environment. My research suggests that economic freedom not only alleviates poverty but can also promote economic prosperity for all people.
Specifically, my findings show that a one-point improvement in economic freedom over a five-year period correlates with substantial decreases in poverty the subsequent year.
And it’s not just the poverty rate that improves. In Pennsylvania, for example, a one-point improvement in its EFNA score over five years is associated with a $2,338 growth in per capita income and a 2.08 percentage point employment increase.
New York, California, Hawaii, Vermont, and Oregon are currently the lowest-ranked states for economic freedom. While New York and California remain relatively wealthy, the other three have per capita personal incomes lower than the national average.
While large jumps are rare, changes in economic freedom tend to accumulate over time. In the same five-year period, Arizona lost nearly a full point on the EFNA index while North Dakota gained a full point. Six additional states changed more than half a point.
Critics might object that cutting government spending would mean decreasing needed assistance to the poor—but this doesn’t have to be the case. And not all government spending is helpful; the federal government spent $281 billion in improper payments in 2021 alone.
Government spending also tends to crowd out what would otherwise be private spending or investment. Even programs that are designed to attract or spur economic development can hamper the business environment.
Economic freedom, however, strongly relates to entrepreneurship. In recent years, people and businesses have fled New York, California, and Illinois—all states that rank low in economic freedom. Where are they going? Texas and Florida are popular choices—both consistently rank among the top five most free states.
By pursuing an agenda of economic freedom, policymakers might be able to decrease poverty and spread the benefits of prosperity more widely. Win-win policy solutions are rare, yet this is an example where government can help more by doing less.
If higher welfare payments keep the leeches in NY,OR, and CA, I’m all for it.
There’s a reason why all these “means tested” programs are scattered among dozens of agencies — so that nobody can easily discover how much any particular person is getting.
Step 1 would need to be to put ALL means-tested programs under one agency, with ONE application and verification process. (then fire all the suddenly redundant government employees).
Step 2 would be to put a ceiling on the total aid a household could get, and make this ceiling less than what the head of household could make at a minimum wage job. And the ceiling does NOT go up if she has additional kids.
2 Thessalonians 3:10
The FEMA camps aren’t in the center of town either.
“There is no free lunch, Abolish all Welfare Programs for able bodied people and put up Soup Kitchens on every corner that needs one”
I guess I don’t understand this. You’re saying no free lunch, but put up soup kitchens to give them one. Help please.
wy69
Its had the results many wanted all along. Entrennches socialism and confiscation of money from those that earned it to those that didn’t, another divisive political wedge issue, more government going into areas it never was intended or designed to do, more govt power.
Nothing good about it. Government charity isn’t charity. Its tyranny. Let the charities be charities, the churches be churches (who often are also charities), and the government, be government.
Regardless of gender.
The purpose of welfare isn’t the well being of the recipients. It’s to fuel the monster known as big government.
Welfare should help the disabled. It should not be a way of life for the able bodied.
Some of us, of course, have a different view of the matter.
bttt
Make people WORK!!!!
We could just let them steal whatever they want, that seems to be working . . .
Well, welfare programs aren’t designed to get people out of poverty, but to keep them in it. So they are working as intended.
You get what you pay for. If you pay people for being poor and unemployed then you will get poor unemployed people.
Amen
Welfare is vote buying. Only lets the elites stay in power.
“I’ll have those ni***rs voting Democrat for the next 200 years.”
President Lyndon Johnson.
Well that's not true. The crime created by funding fatherless families has skyrocketed, and the spending created by this welfare vote buying scheme has also skyrocketed.
Let us not fool ourselves. Welfare was never about anything other than bribing poor people to vote Democrat and keep liberals in power, so that their corrupt influence selling schemes and rewarding of cronies with government money could continue.
Welfare is primarily about keeping liberals in power, and nothing else.
The way the legal system is structured now, you can't get there from here.
The Courts will hold that every one of these worthless indolent people have a right to create as many babies as they want.
I have long suggested that the system offer money incentives to get free vasectomies and tubal ligations for anyone that wants them.
But making them stop? Not going to happen.
Inflation was 100% under Obama, and close to that again under Bitchden.
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